Tuesday, September 30, 2008

Why wait for the world?

WHEN Sir Nicholas Stern's 700-page report to the Blair government on the economics of climate change was published in 2006, it set a global benchmark for thinking about the economics of climate change.

In April the following year, Australia's eight Labor states and territories established the Garnaut Climate Change Review. Professor Ross Garnaut would be our guiding Stern.

Released yesterday, the review's final report, while 100 pages shorter than Stern's, is a critical input into national climate policy and the high water mark for discussion of the impact of global warming on Australia.

It highlights the risks to Australia of even low levels of climate change. With average global warming of as little as 1.5 degrees celsius, iconic ecosystems such as the Great Barrier Reef will be profoundly degraded.

Above two degrees, Australia's food bowl — the Murray Darling Basin — is in deeper crisis, the Great Barrier Reef largely lost, Kakadu, the Daintree and the Alps tragically transformed, and many Australian species extinct. Australia's tourism industry would face exceptional difficulties, our cities greater water shortages. Without strong mitigation, the melting of the Greenland ice sheet and significant sea level rise would "sooner or later become close to a sure thing".

The report recognises that even stabilisation at 450 parts per million (ppm) would deliver only a 50/50 chance of keeping temperature rises at two degrees and would threaten some of our most important and iconic landscapes.

These risks can be reduced by "strong, early and effective action by all major economies", Garnaut writes.

Australia will need to play its full proportionate part in global action. As a developed country, its full part will be relatively large, and involve major early changes to established economic structures. The review shows that the costs, while considerable, are manageable.

There is a path to Australia being a low-emissions economy by the middle of the 21st century, consistent with continuing strong growth in material living standards. By the end of the 21st century and beyond — and more so with each passing decade — material living standards would be higher with than without mitigation of climate change.

Given this net positive assessment, Garnaut's tactics are doubly odd. He shows in great detail that the stakes for Australia are very high, yet he sets his sights very low, yielding to pessimism and ignoring the momentum that can be created by proactive leadership, investment, education and powerful advocacy.

Garnaut's proposal for Australia's medium-term (2020) and long-term (2050) targets is one of the report's central puzzles. These targets are critical. They will determine where emissions caps are set and the position Australia will take in international climate negotiations.

Because of the confusion generated by Garnaut earlier in September, it is worth quoting the relevant passage in full: "The review confirms its recommendation in the supplementary draft report — that Australia should offer to play its full, proportionate part in a global agreement designed to achieve 450 ppm with overshooting. It should offer to reduce its emissions entitlements in 2020 by 25% within an effective global agreement that, on realistic assessment, adds up to the 450 ppm … scenario."

But this position is "conditional", dependent on how international negotiations proceed at Copenhagen in 2009. Garnaut supports cuts of 25% below 2000 levels by 2020 within a global agreement aimed at returning emissions to 450 ppm. However, Australia should adopt a 10% reduction from 2000 levels by 2020 only within a global agreement aimed at stabilising emissions at 550 ppm. An Australian commitment between the 450 and 550 position should correspond to a global agreement in between. In all this, it remains unclear whether his "global agreement" must include India and China — which is highly improbable.

The professor's pessimism over the future of international negotiations is puzzling. He is aware that in Bali late last year, industrialised countries (except the US) effectively agreed to consider seriously emission reduction targets in the range of 25% to 40% by 2020, based on the IPCC's view that this is the least required to help stabilise atmospheric levels of greenhouse gases at 450 ppm and limit warming to two to 2.4 degrees. He also knows that low targets tend to become self-fulfilling prophesies.

His departure from the science is even more problematic. The review reports on the vulnerability of Australian environments, where average warming of one to 1.5 degrees is already "dangerous" climate change. Yet he is prepared to contemplate opting for a target that would lead to 550 ppm or higher, despite his report showing in exceptional detail (while also recognising that it cannot account for a range of "immeasurable" costs) that going down this path will deliver us longer-term economic, social and ecological impacts that are almost unendurable.

Meanwhile, recent Australian studies — for instance, by McKinsey — have indicated that Australia, with its poor levels of energy efficiency compared with other OECD countries, could achieve emissions reductions of some 30% below 2000 levels by 2020 with relative ease, make Garnaut's target choice stranger still. The report also emphasises that the cost of early and effective action is miniscule. In terms of GDP forgone, the difference between Australia immediately adopting a 450 ppm target and emissions reduction trajectory (-25% by 2020) over a 550 ppm one (-10% by 2020) is 0.1% of GDP forgone each year. (In this light, the review's failure to model or consider a 400 ppm, or even a 350 ppm, target is serious. This must be done before commitments are made to medium-term targets.)

The Garnaut report shows in many ways that "the case for strong mitigation is a conservative one". It also rightly indicates that "on a balance of probabilities, the failure of our generation on climate change mitigation would lead to consequences that would haunt humanity until the end of time".

It is prudent for the Labor Government now to be brave and conservative at once. Under these circumstances, it is in Australia's "national interest" to adopt strong, early emissions reduction targets domestically — at minimum 25% and probably greater than 40% by 2020 — and to champion them abroad. This is what Australian leadership on climate change would mean now.

Dr Peter Christoff teaches climate policy at the University of Melbourne and is vice-president of the Australian Conservation Foundation.